Momentum Sequence Entries with Main-Candle Stops and R-Multiple Targets

Summary

This strategy identifies a reversal sequence around a designated main candle. For a long setup, the main candle is bearish and is followed by a configurable run of bullish candles; each must remain above the main candle’s low, and their closes must rise in sequence. The short setup mirrors these conditions with a bullish main candle and consecutively declining bearish candles that stay below its high.

When enabled, entries are taken after the sequence, with the main candle’s extreme defining the stop. The take-profit distance is configurable from 0.5 to 2 times the entry risk. Long trades are enabled by default and shorts are disabled, though either side can be switched on. The script includes visual signals and a settings table, and specifies commission, slippage, and margin assumptions for its strategy configuration. It gives no market selection, timeframe guidance, backtest results, or evidence that the pattern has an edge; outcomes will depend on instrument, execution assumptions, and chosen sequence length.

Key ideas

• A long setup pairs a bearish main candle with consecutive rising bullish candles that stay above its low.
• A short setup pairs a bullish main candle with consecutive falling bearish candles that remain below its high.
• The main candle’s low or high sets the stop for the corresponding trade.
• Take-profit distance is configurable as a fraction or multiple of the initial risk.
• The script defines pattern rules but reports no performance evidence or tested market context.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.